About
Vehicle leasing is the leasing of the use of a motor vehicle for a fixed or indefinite period of time. It is commonly offered by dealers as an alternative to vehicle purchase. The key difference in a lease is that after the lease expires, the lessee must return the vehicle to the dealer or buy it. Leasing offers advantages to both buyers and sellers. For the buyer, lease payments will usually be lower than payments on a car loan would be, and qualification is usually easier. Some consumers may prefer leasing as it allows them to simply return a car and select a new model when the lease expires, allowing a consumer to drive a new vehicle every few years without the responsibility of selling the old vehicles. A lessee does not have to worry about the future value of the vehicle, while a vehicle owner does.
For the lessor, leasing generates income from a vehicle the lessor still owns and will be able to lease again or sell through vehicle remarketing once the original lease has expired. As consumers will typically use a leased vehicle for a shorter period of time than one they buy outright, leasing may generate repeat customers more quickly, which may fit into various aspects of a dealer’s business model.
